BILL ANALYSIS Ó
AB 2492
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Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
AB 2492
(Alejo) - As Amended April 14, 2016
SUBJECT: Community revitalization.
SUMMARY: Makes a number of changes to the Community
Revitalization and Investment Authority program. Specifically,
this bill:
1)Makes a number of changes to the Community Revitalization and
Investment Authority (CRIA) program, including the following:
a) Allows a CRIA to use a combination of both the United
States (US) Census Bureau census track and census block
groups data to identify a project area.
b) Allows a CRIA to use, at their discretion, statewide,
countywide, or citywide levels of area median income to
identify a project area.
c) Clarifies the source of unemployment data required to
identify a CRIA project area and allows a CRIA to use the
unemployment data from the periodic American Community
Survey published by the US Census Bureau in addition to the
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labor market information published by the Employment
Development Department (EDD) in March of the year the CRIA
plan is prepared.
d) Provides that in determining the crime rate of a
proposed CRIA project area, that the crime rate is based on
the area's average crime rate for violent or property
crimes offenses as documented by the records maintained by
the law enforcement agency in the jurisdiction, and
requires the crime rate to be calculated by taking the
local incidents of violent and property crimes or any
offences within those categories for the most recent
calendar year for which the Department of Justice maintains
data and dividing it by the total population of the
proposed plan area and multiplying that amount by 100,000.
Provides that if the local crime rate for the proposed
plan area exceeds the statewide average rate for either
violent or property crime, or any offense within these
categories by more than 5%, then the crime rate necessary
to qualify as a CRIA project area is considered met.
e) Gives a CRIA the same authority as an Enhanced
Infrastructure Financing District (EIFD), to receive funds
allocated to it, pursuant to a resolution adopted by a
city, county, or special district from:
i) The increased property tax revenues that the city,
county, or special district receives from the dissolution
of redevelopment agencies;
ii) Property taxes received by a city or county in lieu
of former vehicle license fee funds; or,
iii) Funds derived from various assessments that may be
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imposed by special districts.
2)Makes other technical changes.
EXISTING LAW:
1)Dissolves redevelopment agencies as of February 1, 2012.
2)Allows local governments to form a CRIA in two ways:
a) A city, county, or city and county can adopt a
resolution creating an authority governed by a five-member
board that is appointed by the city, county, or city and
county's legislative body. Three-board members must be
members of the city, county, or city and county's
legislative body and two must be public members who live or
work within the community revitalization and investment
area; or,
b) A city, county, city and county, and special district,
in any combination, may create an authority by entering
into a joint powers agreement. The authority's governing
body must be comprised of a majority of members from the
legislative bodies of the public agencies that created the
authority. The governing body must include at least two
public members who are appointed by a majority of the
authority's board and must live or work within the
community revitalization and investment area.
3)Prohibits school entities and redevelopment successor agencies
from participating in a CRIA. Prohibits a city or county that
created a former redevelopment agency from forming an
authority, unless the former agency's successor agency has
received a finding of completion from the Department of
Finance (DOF), and complies with other specified conditions.
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4)Allows a CRIA to carry out a community revitalization and
investment plan (plan) within a community revitalization and
investment area. Requires that at least 80% of the land
calculated by census tracts or census block groups within the
area must be characterized by both of the following
conditions:
a) An annual median household income that is less than 80%
of the statewide annual median income; and,
b) Three of the following four conditions:
i) Nonseasonal unemployment that is at least 3% higher
than the statewide median, as defined by a specified
labor market report;
ii) Crime rates that are 5% higher than the statewide
median crime rate, as defined by a specified Department
of Justice report;
iii) Deteriorated or inadequate infrastructure, such as
streets, sidewalks, water supply, sewer treatment or
processing, and parks; or,
iv) Deteriorated commercial or residential structures.
5)Allows a CRIA to carry out a plan within a community
revitalization and investment area established within a former
military base that is principally characterized by
deteriorated or inadequate infrastructure and structures.
6)Allows the legislative body or bodies of the local government
or governments that created the CRIA to appropriate any amount
the legislative body or bodies deem necessary for the
administrative expenses and overhead of the CRIA. The money
appropriated may be paid to the CRIA as a grant to defray the
expenses and overhead, or as a loan to be repaid upon the
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terms and conditions that the legislative body may provide.
If appropriated as a loan, the property owners and residents
within the plan area must be made third-party beneficiaries of
the repayment of the loan.
7)Enumerates a CRIA's powers and allows a CRIA to dedicate
funding to specified infrastructure, low- and moderate-income
housing, brownfield cleanup, seismic retrofits, property
acquisition, construction of specified structures for
provision of air rights, and direct assistance to businesses
for industrial and manufacturing uses.
8)Deems a CRIA to be a local public agency subject to the Ralph
M. Brown Act, the Public Records Act, and the Political Reform
Act.
9)Requires a CRIA to adopt a plan that may include a provision
for the receipt of tax increment funds generated within the
area, provided the plan includes eight specified elements.
10)Specifies the manner in which a CRIA must consider adoption
of the plan, including requiring a public hearing, a protest
process and, in some cases, voter approval of the plan through
a specified election process.
11)Directs a CRIA to consider and adopt a plan amendment in
accordance with the procedures that applied to the
consideration and adoption of the original plan.
12)Allows any city, county, or special district that receives ad
valorem property taxes from property located within an area to
adopt a resolution directing the county auditor-controller to
allocate some or all of its share of tax increment funds
within the area covered by the plan to the CRIA. A resolution
may be repealed by giving the county auditor-controller 60
days' notice. However, the county auditor-controller must
continue to allocate the taxing entity's taxes that have been
pledged to repay debt issued by the authority until the debt
has been fully repaid.
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13)Requires a CRIA to annually review the plan, prepare an
independent financial audit, and adopt an annual report in a
public hearing.
14)Provides that if a CRIA fails to provide the annual report,
the authority shall not spend any funds received pursuant to a
resolution, as specified, until the authority has provided the
report, except for funds necessary to carry out its specified
obligations regarding housing for persons of low- and
moderate-income.
15)Requires a CRIA to conduct a protest proceeding every 10
years. If between 25% and 50% of residents and property
owners file protest, the authority must not initiate any new
projects, until an election of property owners and residents
is held. If a majority of the electorate votes against the
authority, it must not take any further action to implement
the plan.
16)Requires a CRIA to contract every five years for an
independent audit to determine compliance with affordable
housing maintenance and replacement requirements, which must
be conducted according to guidelines established by the
Controller. A CRIA must provide a copy of the completed audit
to the Controller.
FISCAL EFFECT: None
COMMENTS:
1)Bill Summary. This bill makes several changes to AB 2
(Alejo), Chapter 319, Statutes of 2015, which authorizes local
governments to create CRIAs to use tax increment revenue to
improve the infrastructure, assist businesses, and support
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affordable housing in disadvantaged communities. The main
provisions of the bill: a) Allow a CRIA to use a combination
of both the US Census Bureau census track and census block
groups data to identify a project area; b) Allow a CRIA to
use, at their discretion, statewide, countywide, or citywide
levels of area median income to identify a project area; c)
Clarify the source of unemployment data required to identify a
CRIA project area; d) Clarify the determination of the crime
rate or a proposed CRIA project area; and, e) Give a CRIA the
same authority as an EIFD, to receive funds allocated to it,
pursuant to a resolution adopted by a city, county, or special
district, as specified.
This bill is sponsored by the League of California Cities.
2)Author's Statement. According to the author, "The passage of
AB 2 (Alejo) last year has provided local governments with the
critical tools they need to revitalize their communities,
combat blight, and reinvest in their citizens in a
post-realignment world. AB 2492 will clarify existing issues
that have been found in the implementation of that landmark
measure."
3)Background and Previous Legislation. Multiple legislative
measures were introduced after the dissolution of
redevelopment agencies in an effort to provide local
governments options for sustainable community economic
development, including the following:
SB 628 (Beall), Chapter 785, Statutes of 2014. Provides local
governments with new tax increment financing tools to pay for
local economic development by forming an EIFD.
AB 2 (Alejo), Chapter 319, Statutes of 2015. Authorizes local
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governments to create Community Revitalization and Investment
Authorities (authorities) to use tax increment revenue to
improve the infrastructure, assist businesses, and support
affordable housing in disadvantaged communities.
AB 2280 (Alejo) of 2014. Would have established an authority
and given it the same rights, responsibilities and powers as
redevelopment agencies. This bill was vetoed by the Governor.
AB 1080 (Alejo) of 2013. Would have established an authority
and given it the same rights, responsibilities and powers as
redevelopment agencies. This bill was held on suspense in the
Senate Appropriations Committee.
SB 1 (Steinberg) of 2013. Would have allowed local
governments to establish a Sustainable Communities Investment
Authority to finance specified activities within a sustainable
communities investment area using tax increment financing.
This bill died on the Inactive File on the Senate Floor.
SB 1156 (Steinberg) of 2012). Would have allowed local
governments to establish a Sustainable Communities Investment
Authority after July 1, 2012, to finance specified activities
within a sustainable communities investment area using tax
increment financing. This bill was vetoed by the Governor.
4)Arguments in Support. Supporters argue that these minor
changes will help with implementation of the law and will
clean up provisions contained in AB 2 (Alejo).
5)Arguments in Opposition. Opponents argue that the consequence
of this legislation is that it will expand the number of
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communities and neighborhoods in which the government can
exercise its power to forcibly seize private property from
unwilling sellers.
6)Double-Referral. This bill was heard by the Housing and
Community Development Committee on April 27, 2016, where it
passed with a 5-2 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
League of California Cities [SPONSOR]
California Association for Local Economic Development
California Business Properties Association
Cities of Hollister, Thousand Oaks
Hollister Downtown Association
Opposition
California Alliance to Protect Private Property Rights
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Howard Jarvis Taxpayers Association
Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958